Microsoft boasts strong fourth quarter and year

Microsoft on Thursday reported a 13 percent increase in fourth-quarter revenue and a 7.3 percent jump in net income.

The software giant saw double-digit revenue and income increases from its three largest divisions — Client, Server and Tools, and Business — for the quarter ending 30 June, 2007.

Quarterly revenue was $13.37bn (£6.52bn) with diluted earnings per share at 39 cents — in line with analysts' expectations — which was knocked down to 31 cents per share because of its decision to take a $1bn charge for extending Xbox warranties. Annual revenue climbed to more than $51bn — a 15 percent increase — and net income topped $14bn.

The company also upped fiscal year 2008 guidance. It forecast double-digit revenue and earnings growth next year from anticipated server product upgrades, including Windows Server and SQL Server, and from sales of Xbox 360 consoles.

"Our results this quarter cap off an extremely strong fiscal year for the company," said Chris Liddell, chief financial officer at Microsoft, in a statement. "We have healthy core businesses and are strategically investing in growth opportunities."

During a conference call with financial analysts, Liddell said that Microsoft intends to launch Windows Server 2008, SQL Server 2008 and its next edition of Visual Studio in February of next year.

Colleen Healy, Microsoft's general manager of investor relations, said on Thursday that Windows Vista, released at the beginning of the year, was off to a strong start as consumers buy new PCs and corporate customers upgrade. She noted that customers who purchase volume annuity licences grew 25 percent in the quarter.

Other good performances came from its CRM application, which increased by 80,000 seats in the quarter. Microsoft also saw a double-digit increase, at 33 percent, in advertising revenue for its online services business, she said. That unit is still not profitable.

Liddell said that anticipated growth in PC shipments over the coming year will help fuel the company's expectation for continued uptake of Windows Vista, with consumer buyers outpacing corporate customers' PC purchases.

Microsoft executives also indicated that the company intends to ship its Halo 3 game in September this month. Microsoft's Entertainment and Devices Division will be profitable next fiscal year, Liddell said.

Related Links:

• Go back to category Business to read more reviews and articles.
• Go back to Software Magazine's main page.